Lockheed Martin has won a $2.46 billion contract to build high-altitude missile interceptors for Saudi Arabia, a longtime U.S. ally whose relations with Washington have been strained by the grisly killing of a dissident.
The contract, which expands sales at a Lockheed division already profiting from development of hypersonic missiles, is part of a $15 billion sale to the kingdom approved in October 2017 that included 44 terminal high-altitude area defense, or THAAD, launchers and 360 interceptor missiles.
Lockheed Martin, based in Bethesda, Md., declined to comment on the sale.
By strengthening the defenses of both Saudi Arabia and the Gulf region, the contract helps counter threats to U.S. interests from Iran and elsewhere, the State Department has said. A linchpin of American influence in the Middle East, Saudi’s government has faced sharp criticism from members of Congress over the October slaying of journalist Jamal Khashoggi, a critic of Crown Prince Mohammed bin Salman who lived in the U.S.
The slaying, which occurred at the Saudi consulate in Istanbul, and allegations that it was personally ordered by the crown prince left the Trump administration at odds with lawmakers who have proposed suspending some weapons sales to the country in response.
A bill from Democratic Sen. Bob Menendez of New Jersey addressing the weapons sales and imposing other sanctions was reintroduced in February, after dying last year, and referred to the chamber’s Committee on Foreign Relations.
“While Saudi Arabia is a strategic ally, the behavior of the crown prince — in multiple ways — has shown disrespect for the relationship and made him, in my view, beyond toxic,” said Sen. Lindsey Graham, R-S.C., who backed the measure. “I fully realize we have to deal with bad actors and imperfect situations on the international stage. However, when we lose our moral voice, we lose our strongest asset.”
President Trump declined to provide a report requested by Congress on U.S. investigations of the killing, but he and Secretary of State Mike Pompeo have both cited the Saudi government’s denial that the crown prince played any role in it. Pompeo brushed aside a suggestion from Sen. Tim Kaine, D-Va., in February that the U.S. was simply running interference for its ally.
“America is not covering up for a murder,” Pompeo told reporters afterward. “As we get additional information, we’ll continue to hold all of those responsible accountable.”
Saudi Arabia is paying for about $1.5 billion of the contract awarded Monday, while the U.S. is contributing $922 million, the Defense Department said.
Lockheed Chief Financial Officer Kenneth Possenriede told analysts earlier this month that the company had been negotiating with the Missile Defense Agency on the high-altitude defense project and was optimistic about landing more work in the near future.
“We see a lot of demand for our missile defense work,” he said. The company’s missile division garnered $8.46 billion in sales last year, about 16% of total revenue. Lockheed climbed 0.1% to $304.70 in New York trading on Tuesday.
